“In attempting to earn an commission of around USD2,200, One introducing broker (IB) churned and burned 5 clients accounts with multiple GBPNZD trades in less than 15 minutes, causing a total client loss of around USD7,500. This prompts us to issue this official notice to warn clients and affiliates on fraudulent churning activities,” said Marketing Director Damien Middleton.

1. One of our IB, Mr. Mohd Rizal Bin Maslan (Golder Partners AFF 1521) emailed Golder Markets to ask what happened on Thursday 08 September 2011 evening London time and enquired about 5 accounts. Initially, the backoffice staffs have no idea of what’s happening. After a few round of questionings, the firm realised that Rizal was holding on to the clients accounts login details and trading the accounts without any Limited Power of Attorney.

2. After a thorough investigation, Golder Markets realised these 5 accounts were all stop out at around 19:00 platform time on Thursday. The firm looked into our systems and detected that they were multiple GBPNZD trades done on 5 accounts on this IP address 110.159.13.240, which is apparently in Malaysia. In fact, there are apparently 7 accounts concurrently trading on this IP address 110.159.13.240 over the last week including last Thursday incident.

3. On Thursday afternoon London time (which was 2 hours before the trade execution), 2 clients out of the 7 clients requested for withdrawal. Funds are also released to these 2 clients on Friday morning.

4. On the balance 5 accounts, there are close to 15-20 GBPNZD trades executed in less than 15 minutes, all 0.5 standard lots per trade per account. All accounts were stopped out till the stage of negative free margin and even the credit bonus were all lost. As GBPNZD is a high spread currency pair, the 25% commission Mr. Rizal supposed to receive totaled $2,223.67 with just these trades in 15 minutes.

5. At the same time, Rizal’s introducing website (goldermarkets dot biz) now shifted to introduce other broker.

6. Due to the seriousness of this issue, Golder Markets had suspended Mr. Rizal’s IB account as he suspected of trying to churn and burn the accounts before clients withdraw the fund. This finding is not conclusive yet.

8. If you had allowed someone to get hold of your account before, Golder Markets strongly advise you not to let anyone have your passwords. Even with client permission, IBs or affiliates should not be holding on to the login details and should advise clients to change the login details immediately.

“While the forex industry is driven by trade volume, we cannot tolerate partners to trade clients’ accounts without LPOA. Clients who want their accounts to be managed must be authorised under a Multi-Account Management (MAM) with a Limited Power of Attorney (LPOA).” said Middleton.

“Golder Markets, or any major brokers I should say, will not tolerate any partners, affiliates, introducing brokers, white label partners in attempting to churn and damage clients accounts or whatsoever.” he added.